At a recent US House Armed Services Committee hearing, Secretary of Defense Pete Hegseth revealed that the Pentagon is conducting certain classified operations involving Bitcoin (BTC) and other cryptocurrencies. The revelation came in response to Representative Lance Gooden, who questioned whether the United States was using Bitcoin to gain a strategic edge over China.
Cryptocurrencies as a national security issue
During the committee session, Gooden emphasized that Bitcoin should be viewed not just as a financial asset but as a matter of national security. Hegseth agreed, stating his longstanding belief in the potential of Bitcoin and cryptocurrencies within the military arena. Without disclosing specific details, he confirmed that the Department of Defense is pursuing confidential projects aimed at supporting or countering crypto-related threats.
In his remarks, Hegseth highlighted that military officials are now considering Bitcoin in the context of strategic balance, cybersecurity, and competition with China. However, he refrained from sharing further information about the scope or nature of the Pentagon’s classified crypto initiatives.
US military is running a Bitcoin node
Responding to Gooden’s inquiry, Admiral Samuel Paparo—Commander of US Indo-Pacific Command—disclosed that his command currently operates a Bitcoin node. Paparo clarified that the node is not used for mining or commercial purposes, but rather as part of research focused on network security.
Additional statements from Gooden’s office noted that Paparo considers Bitcoin—particularly its cryptography, proof of work mechanism, and network security characteristics—as a valuable tool in computer science. The Pentagon is reportedly using its node to conduct operational tests on network monitoring and cybersecurity.
Contested BTC holdings of US and China
Gooden referenced estimates from the Bitcoin Policy Institute, suggesting that China currently holds about 194,000 BTC, while the United States maintains roughly 328,000 BTC. Although based on speculative data, these figures underscore Bitcoin’s growing importance in national security policymaking.
Gooden also argued that Bitcoin has moved beyond being a mere “alternative financial tool,” becoming integral to security discussions. The hearings raised concerns such as potential crypto demands in the Strait of Hormuz, North Korea-linked cybercrime, and alleged Chinese Bitcoin reserves.
Public sources confirm ongoing risks of crypto theft linked to North Korea and potential crypto-based payments to Iran, though the Pentagon has not officially corroborated every claim. As a result, some allegations require careful scrutiny.
Pete Hegseth explained that the Pentagon maintains secrecy over some of its digital asset activities and confirmed that military officials now assess cryptocurrencies from both a military competition and cyber defense perspective.
Ultimately, Hegseth’s acknowledgment of classified Pentagon projects and Paparo’s disclosure that the US military is actively running a Bitcoin node illustrate how digital assets are entering the realm of military and geopolitical strategy.
